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EU Ag Council Advocates Dairy Production Limits to Tackle Crisis

EU - The European Commission has activated unprecedented measures to combat the crisis in agricultural markets, after a meeting of ministers which was met by farmer protesters in Brussels this week.

The new measures, outlined by Agriculture Commissioner Phil Hogan, make use of all the tools made available in the Common Agricultural Policy (CAP) to support EU farmers, whilst remaining flexible to the needs of different member states, the Commission said.

Acknowledging the depth and duration of the current agricultural crisis, the Commission said the measures complement the €500 million support package put in place last September.

"In the interest of EU farmers, I am prepared to use all instruments that the legislators have put at our disposal, both as a short term and long term measure.

"We must use the appropriate instruments and actions to enable farmers to be resilient in the face of volatility whilst providing immediate assistance to them.

"Today's response is a comprehensive one, taking on board as many of the proposals as can be done, within the legal and budgetary constraints that apply to all of us.

"I believe that this is a package of measures which, when taken with the full implementation of the September solidarity package, can have a material and positive impact on European agricultural markets and it should now be given the chance to succeed," Mr Hogan said at the Council of Agriculture Ministers.

Dairy, pigmeat and fruit and vegetable sectors are the main focus of this support package.

Voluntary supply management

Various organisations such as the European Milk Board (EMB) have for some time been calling for voluntary supply management to reduce the amount of products entering the market, and thereby increase prices.

The Commission said it will activate, for a limited period of time, the possibility to enable producer organisations, interbranch organisations and cooperatives in the dairy sector to establish voluntary agreements on their production and supply.

This is the so-called Article 222 from the Common Market Organisation (CMO), which is specific to the agricultural sector and can be applied in case of severe imbalance in the market.

The Commission has concluded that the strict conditions for the application of this article to the dairy sector are fulfilled in the current circumstances. This is an exceptional measure, which must also safeguard the EU internal market and was included by the legislators in the 2013 CAP reform but never used before.

Other measures

Other measures to be used include:

an increase in state aid that can be given to farmers;

the volume ceilings for skimmed milk powder and butter put into intervention are doubled;

national representatives to meet with the Agricultural Markets Taskforce to look at improving the status of particularly dairy farmers within the supply chain;

a new private storage scheme for pigmeat will be considered;

a Meat Market Observatory will be set up to monitor market conditions;

working to open new markets, support exports and promote consumption of EU products;

continuing work to lift phytosanitary bans in the key Russian market.

Reaction

Reacting to the new aid package, EU farmers' organisation Copa and Cogeca said it’s a move forward and has the potential to alleviate pressure hitting the EU agricultural markets, but it remains to be seen how it will work in practice.

Copa President Martin Merrild emphasised in his statement the importance of the Russian market, and said the common EU policy should "shoulder the consequences of international policy developments”.

"Many farmers across Europe are facing the worst crisis since the early 1980s. The EU dairy and pigmeat sectors are bleeding. They were hit by the loss of our main export market Russia - worth 5.1 billion euros. The Russian market must be reopened as soon as possible," he said.

Mr Merrild continued: “This package agreed today has the potential to help improve the crisis, especially some of the market management measures, use of export credit insurance and additional financial instruments.

"It is also good that the EU milk market observatory has been extended to other sectors other than dairy.

"But I urge Ministers to step up payments of the 500 million euros package released by the EU last September as only part of the aid has been paid out."